Community Development Working Papers
Working papers provide in-depth analysis of emerging community development issues from practitioners and scholars.
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Lessons on Cross-Sector Community Development: The Las Vegas Healthy Communities Coalition
Laura Choi
The Federal Reserve Bank of San Francisco, in partnership with the Robert Wood Johnson Foundation, launched the “Healthy Communities” initiative in 2010 to explore how the health and community development sectors can collaborate. A regional meeting took place in Las Vegas in January 2012, which led to the formation of the Las Vegas Healthy Communities Coalition (LVHCC), a collective impact initiative with a mission to “foster collaboration and coordination across multiple sectors and stakeholders, to generate healthy outcomes for all Southern Nevadans.” This report details the formation and progress of LVHCC, which is still in the early stages of development. Unlike other case studies, which often report on an initiative’s success after many years of careful planning and implementation, this study aims to provide a candid look at the challenging and emergent nature of cross-sector collaboration in progress. It is meant to shed light on specific challenges and lessons that have been learned in Las Vegas thus far in order to help other communities that have embarked on their own community collaboratives.
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Increasing Financial Capability among Economically Vulnerable Youth: MY Path
Vernon Loke, Eastern Washington University; Margaret Libby, Mission SF Community Financial Center; Laura Choi, Federal Reserve Bank of San Francisco
This report provides research findings from two different phases of “MY Path,” a financial capability initiative that provides employed disadvantaged youth with peer-led financial education trainings, a savings account at a mainstream financial institution and incentives to set and meet savings goals. The initiative is operated by Mission SF Community Financial Center (Mission SF), a nonprofit that strives to promote financial security and catalyze economic mobility for lower-income households.
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The Subprime Crisis in Suburbia: Exploring the Links Between Foreclosures and Suburban Poverty
Chris Schildt, University of California, Berkeley; Naomi Cytron, Federal Reserve Bank of San Francisco; Elizabeth Kneebone, Brookings Institution; Carolina Reid, University of California, Berkeley
In this brief, we provide an overview of patterns of subprime lending, as well as trends in foreclosures and REOs, in suburban communities compared to inner-cities. We also explore the relationship between foreclosures in suburban areas and the increased suburbanization of poverty. We find that the vast majority of foreclosures–nearly three out of four (73.1 percent)—have been in suburban areas, and that suburban neighborhoods with higher rates of poverty are more likely to experience higher foreclosure rates. This is of concern because the mechanisms for addressing the challenges associated with concentrated foreclosures can be more difficult to implement in suburban areas; suburbs may have smaller local governments, fewer nonprofits, and a more dispersed urban form, making it difficult for cities or nonprofits to administer programs or for residents to access them. Because the distribution of foreclosed homes has significant implications for the long-term stability of suburban neighborhoods, increased resources and attention should be devoted to developing foreclosure responses that take into account the capacity and access challenges that are unique to suburban neighborhoods.
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From Cashing Checks to Building Assets: A Case Study of the Check Cashing/Credit Union Hybrid Service Model
Laura Choi, Federal Reserve Bank of San Francisco
This case study examines the pilot effort of Community Trust Prospera (CT Prospera), a division of Self-Help Federal Credit Union, to combine the accessible services of a check-casher with the longer-term depository and lending relationship opportunities of a mainstream financial institution.
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Money Savvy Youth: Evaluating the Effectiveness of Financial Education for Fourth and Fifth Graders
Charles G. Go and Karen Varcoe, University of California Cooperative Extension, Tina Eng and Wilson Pho, East Bay Asian Local Development Corporation, and Laura Choi, Federal Reserve Bank of San Francisco
While there are studies on the impact of financial education on teens, there is a lack of research on programs targeted at elementary school-aged youth. To address this gap, we evaluated the effectiveness of Money Savvy Youth (MSY), a financial education program for fourth and fifth graders, developed by the East Bay Asian Local Development Corporation. MSY training was delivered in the classroom once a week over the course of five weeks during the 2011-2012 school year, and targeted a diverse and primarily low-income student population attending public schools in the Oakland Unified School District in Oakland, California. Based on pre-test, posttest, and follow-up test analyses, we found that students who participated in the MSY program demonstrated an increase in financial knowledge and self-reported positive financial behaviors.
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Improving Evaluation and Metrics in Youth Financial Education
Laura Choi and Carolina Reid, Federal Reserve Bank of San Francisco; Michael Staten, University of Arizona; and Richard Todd, Federal Reserve Bank of Minneapolis
The Federal Reserve Bank of San Francisco, the Take Charge America Institute at the University of Arizona, and the Federal Reserve Bank of Minneapolis invited a small group of researchers and practitioners to discuss how to improve the evaluation and metrics of youth financial education programs. The meeting focused specifically on youth — which we defined as individuals under the age of 25 – in an effort to distinguish this effort from others that have discussed financial education research more broadly. The goal for the meeting was to help create a research agenda that would move the field towards the development of clearly defined outcomes for youth financial education, metrics for capturing ROI, and quality standards for curriculum and delivery that would serve as “best practices” for educators seeking to offer effective financial education interventions.
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Using the Framework of the Community Reinvestment Act to Support Rural Communities in China
Prabal Chakrabarti, Federal Reserve Bank of Boston
The Xi’an branch of the People’s Bank of China reached out to the Federal Reserve Banks of Boston and San Francisco to learn more and engage in a dialogue about how CRA might be applied in China. The discussion was a study in contrast, but also uncovered some surprising areas of commonality.
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Sought or Sold? Social Embeddedness and Consumer Decisions in the Mortgage Market
Carolina Reid, Federal Reserve Bank of San Francisco
This research paper explores how mortgage market channels interacted with localized social networks to shape loan outcomes for historically disadvantaged borrowers. How did borrowers decide on their choice of lender? What loan products were they offered, and how knowledgeable were they about their loan terms? Were loans in lower-income and minority communities “sold or sought?” To answer these questions, the paper relies on in-depth interviews, local data on mortgage lending and foreclosures, and analysis of the institutions and marketing practices in two communities that represent the two faces of the mortgage crisis in California: an older, predominantly minority neighborhood with an older housing stock (Oakland), and a fast growing suburban area characterized by new construction (Stockton). This research can inform the policy debate around consumer protection regulations and fair lending laws, as well as help local practitioners such as homeownership counselors understand how borrowers access and make decisions about mortgage credit.
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Who Receives a Mortgage Modification? Race and Income Differentials in Loan Workouts
J. Michael Collins, University of Wisconsin-Madison, and Carolina Reid, Federal Reserve Bank of San Francisco
Loan modifications offer one strategy to prevent mortgage foreclosures by lowering interest rates, extending loan terms and/or reducing principal balance owed. Yet we know very little about who receives loan modifications and/or the terms of the modification. This paper uses data from a sample of subprime loans made in 2005 to examine the incidence of loan modifications among borrowers in California, Oregon and Washington. The results suggest although loan modifications remain a rarely used option among the servicers in these data, there is no evidence that minority borrowers are less likely to receive a modification or less aggressive modification than white borrowers. Most modifications involve reductions in the loan’s interest rate, and an increase in principal balance. We also find that modifications reduce the likelihood of subsequent default, particularly for minority borrowers.
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Charter School Tax Credit: Investing in Human Capital
Ian Galloway
This working paper considers how two existing policy tools–investment tax credits and charter schools–could be combined to raise operating funds for charter schools that successfully close the poverty-related academic achievement gap. Some charter schools have succeeded in dramatically improving low-income student performance (those run by KIPP, Achievement First, and the Harlem Children’s Zone, for example). However, these successful schools differ significantly in type and approach. As a result, it is difficult to identify a single, or combination of variables in any one charter that, if replicated, would produce the same results across the public school system. This working paper acknowledges the difficulty of so-called “silver bullet” school reform replication and considers an alternative: cultivating a diverse array of education approaches using tools developed by the community development finance industry over the last 30 years.